Correlation Between Workday and Asure Software

Can any of the company-specific risk be diversified away by investing in both Workday and Asure Software at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Workday and Asure Software into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Workday and Asure Software, you can compare the effects of market volatilities on Workday and Asure Software and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Workday with a short position of Asure Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Workday and Asure Software.

Diversification Opportunities for Workday and Asure Software

0.17

Correlation Coefficient

Workday  Asure Software

Average diversification

The 3 months correlation between Workday and Asure is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Workday and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software and Workday is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Workday are associated (or correlated) with Asure Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asure Software has no effect on the direction of Workday i.e., Workday and Asure Software go up and down completely randomly.

Pair Corralation between Workday and Asure Software

Given the investment horizon of 90 days Workday is expected to generate 0.61 times more return on investment than Asure Software. However, Workday is 1.64 times less risky than Asure Software. It trades about 0.05 of its potential returns per unit of risk. Asure Software is currently generating about 0.03 per unit of risk. If you would invest  16,754  in Workday on October 10, 2024 and sell it today you would earn a total of  8,214  from holding Workday or generate 49.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Workday  vs.  Asure Software

Workday

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Workday are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Workday is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Asure Software

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Asure Software are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Asure Software reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Workday and Asure Software

The main advantage of trading using opposite Workday and Asure Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Workday position performs unexpectedly, Asure Software can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Asure Software will offset losses from the drop in Asure Software's long position.

The idea behind Workday and Asure Software pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.